A group of billionaires, including Peter Thiel, would have planned to launch a new financial services company to fill the gap left by the collapse of Silicon Valley Bank in March 2023.
The new bank, which is called Erebor, will focus on the service of startups and cryptocurrency companies, according to the Financial Times, which has cited anonymous sources familiar with the plans. The project requested an American banking charter, which allows financial institutions to operate as a bank.
The Thiel venture capital fund, Founders Fund, is one of the first investors in the bank. In addition to Thiel, the group would understand Palmer Luckey, co-founder of the defense entrepreneur Andendil, and Joe Lonsdale, founder of 8VC.
Thiel, who co -founded Paypal in the late 1990s, is well known in the crypto space for his Bitcoin plea Btcusd and digital assets. As Cointelegraph reported, Thiel supports Crypto Exchange Exchange, which recently submitted regulatory deposits for a first public offer in the United States.
In addition to serving cryptographic companies, Erebor would aim to become a major lender for startups in start -ups and other “more risky” companies that may have trouble accessing capital in the midst of more strict banking regulations.
The collapse of Silicon Valley Bank is still reflected in the cryptography sector
California’s financial surveillance closed the Silicon Valley Bank in March 2023 after the increase in interest rates eroded the value of its long -term bond investment, triggering a banking crisis and a liquidity crisis when too many customers have tried to withdraw funds at the same time. As Cointelegraph reported it at the time, the Silicon Valley Bank was the first bank provided by the FDIC to fail that year.
Its collapse has left a massive gap on the market, because the bank had served about half of all technology and life sciences supported by venture capital in the United States.
Failure triggered a domino effect, contributing to a wider banking crisis which also shot down Silvergate Bank, Signature Bank and First Republic Bank.
The spinoffs brought a hard blow to the digital asset market, cryptographic investment funds losing 10% of their assets under management in just one week.
As Harvard Business Review noted, the collapse of Silicon Valley Bank specifically exerted significant pressure on loans in the venture capital ecosystem.
Despite its collapse, the Silicon Valley Bank still works today as a division of First Citizens Bank, which acquired the company at the end of March 2023.
